KPMG in Taiwan is honored to release the 2021 Taiwan Banking Report, a third consecutive issue, in order to live up to KPMG’s vision of being the Clear Choice for clients. In this report, KPMG in Taiwan will elaborate on several issues of influence and significance in 2020 that were selected based on our professionals’ customer service experience and observations on domestic and foreign market trends, hoping to give readers insight into the development of Taiwan’s banking industry from different perspectives.
The world of 2020 was in uncharted waters as the COVID-19 pandemic took a heavy toll on the overall economic and industrial activity, which could be worse than the 2008 financial crisis. Countries around the world were hit hard by the pandemic, and Taiwan was no exception; nonetheless, economic activity in Taiwan continued as usual as the government took proper epidemic prevention measures and sent out relief money. In response to the government policy, domestic banks took on the responsibility to help keep businesses afloat, which encumbered their profitability and growth momentum, along with reduced consumer spending due to the border closure; however, the pandemic emerged as a catalyst for contactless business, pushing domestic banks to speed up the development of digital financial services.
Among the domestic industries, the financial services industry has led in digital transformation and even made great strides last year. In 2020, domestic banks reported an increase in the number of digital accounts by more than 90% and in the amount of mobile payments by more than 100% from the previous year. This indicated that people were more willing to accept digital financial services, which would be conducive to the development of financial innovation and inclusion. The underlying difference between digital finance and traditional finance is that digital finance provides user-friendly services by combining emerging technologies with scenarios in life. Combining financial services with digital technologies is expected to help banks achieve breakthrough growth. With more applications of digital financial services being rolled out, ecosystem management should be included in the business strategies while cross-disciplinary talent and information security are key issues that require continuous attention on the part of the operation.
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In addition to keeping abreast of international trends in and outlooks for digital finance, domestic banks should pay close attention to the slow withdrawal of the government’s relief measures and the operational risks of corporation loan after the COVID-19 pandemic subsides.